The Vietnamese reinsurance market showed a continued reliance on proportional treaties for capacity during the January 1, 2025 renewals, according to a recent report by Gallagher Re. While excess of loss treaties remained relatively limited, with low attachment points and limits, the market’s overall dynamics have remained competitive due to a combination of low natural catastrophe activity and stable treaty performance.
However, Typhoon Yagi, which hit Vietnam in September 2024, caused substantial damage, with property and engineering losses estimated at around $400 million. This was the largest natural catastrophe loss recorded in the market to date. Despite the significant loss, proportional treaties were largely unaffected thanks to their structural resilience, with many reinsurers projecting positive balances despite the event.
In contrast, the excess of loss contracts experienced mixed outcomes. While contracts with minor to moderate losses remained priced competitively, those impacted more severely saw significant rate hikes. For proportional treaties, commissions ranged from 0% to -2%, reflecting the varied outcomes across the market.
Despite the challenges posed by Typhoon Yagi, the reinsurance market saw an increase in the number of reinsurers willing to provide quotes, ensuring an ample supply of capacity. Gallagher Re also noted that globally, property renewals at the start of 2025 followed a stable trajectory, with sufficient capacity supporting favorable market conditions, although individual account circumstances led to varied pricing and terms.
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